How European Shale Gas Could Destroy Russia's Favorite Cash Cow

As shale gas becomes a reality in the U.S., now causing industry
players to worry about a long-term glut
of cheap natural gas in North America, the industry is
promoting Europe's potential in this regard as well.

While Europe doesn't have the shale resources of North America,
any bit could go a long way given that much of the continent is
currently prisoner to the whims of Russia and its massive natural
gas production.

Thus James Slutz, the director of International Oil and Gas
Ventures for Washington-based CAPPA Fund III, has emphasized the
political benefits at a technical forum in Italy:

Slutz highlighted the geopolitical implications of developing a
new source of natural gas in Europe. "Recent years have witnessed
Russian dominance of natural gas pipelines, and the associated
energy security concerns in Europe. What is the European
commitment to energy security? How quickly will shale gas
resources be developed? Shale gas has dramatically
changed North America from an expected large gas importer to
potentially a gas exporter – in under a decade.Many Russian experts see shale gas as a threat to their
market share and their resulting political influence in
Europe."

...

Shale gas deposits exist throughout western and central Europe,
with large potentially recoverable reserves in Poland, Germany,
Hungary, Romania, and neighboring countries. Initial exploration
is already under way in Poland, Sweden and Germany, but
additional exploration is needed to determine the extent of the
reserves. Conservative estimates place the potential at around
500 Tcf, or roughly 5% of existing global supply.

Poland is the most promising country because of its large
reserves, with several oil majors and super-majors already
initiating exploratory drilling, but government regulation and
licensing is a key factor in any decision to make a direct
investment in a foreign country. "The fact is, almost every
country in that region has shale gas deposits, and those who
develop it will be those that provide a transparent and
predictable environment for investors in a long term, high risk,
capital-intensive industry," said Slutz.

He's obviously pitching his industry to European nations, but the
development of shale gas in Europe is probably a win-win. Except
for Russia, whose economy is heavily dependent on oil &
natural gas exports according to
the EIA. You can read more about the situation at Rig
Zone.